ACCWIZBEE

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Which of the following is true regarding debits and credits?

• 1. In the income statement, debits are used to increase account balance whereas in the statement of financial position, credits are used to increase account balances.

• The rules for debit and credit and the normal balance of share capital are the same for liabilities.

• 1. In the income statement, revenue is increased by a debit whereas in the statement of financial position retained earnings account is increased by a credit.

• 1. Before adjustments, debits will not equal credits in the trial balance.

 The adjusting entry at the end of the accounting period to reflect revenues earned but not yet collected or recorded will

• decrease liabilities

• increase assets

• not affect assets

• not affect net income for the period

BSA Company received P9,600 on April 1, 2022 for one year rent in advance and recorded the transaction with a credit to a nominal account.  The December 31, 2022 adjusting entry is

• debit Rent Income and credit Unearned Rent, P2,400.

• 1. debit Rent Income and credit Unearned Rent, P7,200.

• 1. debit Unearned Rent and credit Rent Income, P2,400.

• 1. debit Unearned Rent and credit Rent Income, P7,200.

A credit sale of P800 after trade discount of 25 is made on April 25, terms 2/10, n/30, on which a return of P50 is granted on April 28. What amount is received as payment in full on May 4?

• 1. P735

• P784

• P800

• d P750

True or False:

1. I. Post-closing trial balance will show balance sheet and income statement accounts

2. II. Accounts receivable is an item of working capital

• Both statements are true

• Both statements are false

• 1. Statement 1 is true, Statement 2 is false

• 1. Statement 1 is false, Statement 2 is true

If during the accounting period the assets increased by P 14,000 and equity increased by P 4,000, then how did liabilities change?

• Increased by P10,000

• Increased by P4,000

• Decreased by P4,000

• Decreased by P10,000

• Decreased by P18,000

Four Individuals who were previously sole proprietors form a partnership. Each partner contributes inventory and equipment for use by the partnership. What basis should the partnership use to record the contributed assets? 

• Equipment at each proprietor's carrying amount

• Equipment at fair value

• Inventory at the lower of FIFO Cost or Market

• Inventory at the lower of weighted-average cost or Market

Beginning capital was P 10,000. Withdrawals were P 24,000. The owner made additional investments during year of P 60,000. Effected stock split 2:1 during the year. The ending capital balance was P 90,000. What was the net income or net loss for the period?

• Net income, P56,000

• Net loss, P44,000

• Net income, P44,000

• Net income, P30,000

• None of the above

“The life of a business firm can be segmented into short run time periods in order to provide timely financial information to aid in financial decision making; hence, periodic reporting implies the use of accrual accounting and use of estimates ( approximations) and informed judgment by accountants.” This postulate is referred to as

• Historical Cost

• 1. Accounting Estimates

• Fiscal Period

• 1. Going Concern